Read more at: http://www.bloomberg.com/news/2013-10-10/aeroflot-to-open-low-cost-unit-after-easyjet-wizz-enter-russia.html
This event recalls what management theorists usually define as a band-wagon effect or even an exchange of threat. In other words, once being attacked in your own territory you respond by imitating your competitors and/or by attacking them with their own "weapons". Previous attempts by established airlines to imitate low costs have almost always failed (ex. Song airline of Delta Air Lines).
Do you think Aeroflot will be successful in winning this game?
Is it sufficient for a differentiator like Aeroflot to simply copy an established low cost model (such as the Easyjet and the Ryanair ones)?
Group: ReJa
RispondiEliminaAeroflot will have a very hard time to enter and survive on the airplane market. If the demand on this market is not increasing, this means lower revenue and lower returns for all the competing companies.
Because Aeroflot is only focusing on the domestic market in Russia, its chances to survive are smaller then those of Easy Jet for example which is expanding their flights all over European cities. Furthermore its competitors are arriving in the domestic airplane market in Russia, Easy Jet is offering flights from London to Moscow, creating a competitive advantage.
Also Aeroflot should not simply copy the model of the other low-cost companies but should try to differentiate itself so people have a reason to choose this airline instead of the other ones. If they keep on just copying they will fail as SkyExpress.
To be competitive they have to offer cheaper flights with maybe larger seats or that the luggage will still be out of fees. Only be showing that they are new and different at the market will give them the chance to stay on it.
Group: DANELVIC
RispondiEliminaAeroflot wants to take over the market in Russia by imitating Ryanair´s low cost strategy. For the success of this company, just low prices are not enough. Aeroflot should try to offer more quality at the same price or less price than the competitors. Another advantage that they could use is the flexibility on flights, by increasing the number in and out of Russia(a large quantity of airports available on Russia). In our opinion, first they have to gain the loyalty of customers that travel from or to Russia, afterwards they should keep expanding to other european countries starting by Eastern countries wich are easier for them to attract.
Group: WhatsApp
RispondiEliminaWe think that it Is not sufficient for a differentiator like Aeroflot to simply copy an established low cost model (such as the Easyjet and the Ryanair ones) to be successful. In fact there are many differences such as the territory in which they operate: Europe and Russia, also consumer are different, so we are not really sure about Aeroflot's success; it depends also by the Russian government... Probably the industry of low cost flights will be the future and we don't know if there will be much market share left.
GRASSHOPPER
RispondiEliminaAeroflot's policy to imitate Easyjet and Ryanair will probably fail. Aeroflot aims to copy these company's strategy to gain competitive advantage over them and to protect its airline home marke. Aeroflot's decision to lower prices, inscrease density seating are great decisions in order to increase profit. However they shouldn't exagerate with price decrease because people still feel confident with Easyjet and Ryanair and prefer flying with them. Aeroflot's strategy will certainly give results in the long run if the company survives in the short-run. Aeroflot may also include new innovations such as free luggages which might stimulate the population to pick their company. Aeroflot should also expand and increase their routes to win this game.